Social Security is primarily funded through dedicated payroll taxes called Federal Insurance Contributions Act tax (FICA). (src: Wikipedia)

Is there anything in the law (or a court finding) that makes this a requirement?

I know that in some cases general revenues were used (2011/2012) to finance the Fund.

Is there anything on the books that would prevent government from simply slashing FICA tax to 0% (it being "regressive" as thus explained as being morally wrong, as a justification) and making 100% of payments to SS be from general revenue?

  • I know that SS owns trillions in intergovernmental transfers. these "investments" earn interest and will eventually need to be repaid to the SSA. Since that money must be repaid from the general fund, I dont see why FICA couldnt be completely eliminated. (barring some statute that could obviously be overturned.)
    – user1873
    Feb 14, 2013 at 19:24
  • @user1873 - I would consider "money derived from FICA, even as interest on it", as being part of "FICA", for the purposes of this question. Point is, is there anything aside from political opposition that would stop a President from issuing an executive order (or Congress passing a law) making FICA 0%?
    – user4012
    Feb 14, 2013 at 19:59
  • As Social Security draws down its trust fund (FICA), it sells bonds back to the Treasury. The money it gets for those bonds comes from the general fund (from motherjones.com/kevin-drum/2012/11/…)
    – SeanC
    Feb 14, 2013 at 21:18
  • @SeanCheshire - accounting wise, they are already on the balance sheet as liabilities, to match the money gotten as assets from bond sales. Balance sheet wise it's a wash (just time delayed), so shouldn't impact the answer to this question.
    – user4012
    Feb 14, 2013 at 21:25
  • In theory SSI is a retirement investment. The more you put in the more you get out. So if you pay none in then you are not entitled to take any out at retirement. Feb 14, 2013 at 22:06

1 Answer 1


Trust Funds:
sections (a) and (b) define the funds, and where the money comes from (payroll taxes).
Section (h) is what defines which fund is used to pay each part of Social Security (emphasis mine)

(h) Benefit payments
Benefit payments required to be made under section 423 of this title, and benefit payments required to be made under subsection (b), (c), or (d) of section 402 of this title to individuals entitled to benefits on the basis of the wages and self-employment income of an individual entitled to disability insurance benefits, shall be made only from the Federal Disability Insurance Trust Fund. All other benefit payments required to be made under this subchapter (other than section 426 of this title) shall be made only from the Federal Old-Age and Survivors Insurance Trust Fund.

402: Old-age and survivors insurance benefit payments
423: Disability insurance benefit payments
426: Entitlement to hospital insurance benefits

(to your comment on interest, it is defined in section (f) that this does go back into the fund)

  • Wait, then how do they justify using general budget for paying 2011/2012 benefits when there was shortfall?
    – user4012
    Feb 14, 2013 at 21:45
  • well, I don't know how they justify it, but in H.R.2419 Food, Conservation, and Energy Act of 2008, SEC. 15361. PROTECTION OF SOCIAL SECURITY., it allowed for payments into the fund. No doubt there's other such appropriations on other bills
    – SeanC
    Feb 14, 2013 at 21:56
  • @DVK - Because they used the trust fund to pay general budget debts instead of taking on other debt in the 1970ish-2009(It ran dry in 2009) - What they did in 2012 was actually serviced the debt they owed the trust fund instead of just carring the interest they were accruing against it over) Feb 14, 2013 at 22:15
  • @SeanCheshire - Oh, so it was specific rules for a specific allocation in those years, no some general mechanism that automatically kicks in? Curious. I'll ask for justification in a separate Q.
    – user4012
    Feb 14, 2013 at 22:24
  • @Chad - Hm... that wasn't an impression I got from Wiki's wording. I asked separately: politics.stackexchange.com/questions/1016/…
    – user4012
    Feb 14, 2013 at 22:32

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